President Donald Trump’s pledge to impose tariffs on all imports of steel and aluminum sent the dollar higher as investors braced for increased global trade tensions.
Hong Kong stocks rallied.Equities presented a mixed picture with a benchmark of Asian shares dropping the most in a week while the S&P 500 futures and contracts for Euro Stoxx 50 edged higher.
A gauge of the dollar climbed 0.2%, underscoring investors’ concerns about the inflationary effect of tariffs and how that might influence the Federal Reserve’s policy easing cycle.
Trump’s intention to announce a 25% levy on steel and aluminum Monday added to already tense sentiment before Fed Chair Jerome Powell’s semiannual congressional testimony and the US President’s possible unveiling of reciprocal tariffs on “everyone” this week.
Trump said the metals tariffs would apply to imports from all countries, though he didn’t specify when they would take effect.
“Markets continue to react to Trump policy shifts rather than economic data,” Bob Savage, head of markets strategy and insights at BNY, wrote in a note to clients. “The take from Fed Chair Powell will be critical in judging the costs of tariffs and other policy shifts on easing plans.”
